Sydney, Jan 15, 2009 AEST (ABN Newswire) - Overnight US stocks fell sharply after the worse-than-expected retail sales figures and renewed concerns over the health of banks and other companies. The US lawmakers said a US economic stimulus package being negotiated in the US Congress may grow to as much as $US850 billion.
Yesterday the Australian stock market closed nearly 1% higher with gains in banking and resource sectors. The benchmark S&P/ASX200 index ended up 32.4 points, or 0.9%, at 3687 and the broader All Ordinaries index was up 30.4 points, or 0.9%, at 3624.3. Earlier, the market had sunk into negative territory. Today's focus will be the official unemployment figures for December 2008 which are expected to rise on the deepened credit crisis.
At 0823 AEDT on the Sydney Futures Exchange, the March Share Price Index futures contract was down 104 points at 3,561.
The Australian dollar has opened lower after falling commodity prices and weak US retail sales figures boosted demand for US dollars and pushed the local currency back towards $US0.6600. At 7am (AEDT), the Australian dollar was trading at $US0.6603/06, down almost two US cents, or 2.9 per cent, from Wednesday's close of $US0.6799/03.
Oil prices ended lower in New York as rising oil and product inventories provided a testament to weakening demand. Light, sweet crude for February delivery settled US50 cents, or 1.3 per cent, lower at $US37.28 a barrel on the New York Mercantile Exchange.
Key Economic Facts and Figures
The Australian Bureau of Statistics (ABS) data showed that overall home loan approvals rose for the second straight month in November while the popularity of fixed-rate loans dived to a record low. The number of housing finance commitments for owner-occupiers rose 1.3 per cent in November, seasonally adjusted. The government's aggressive rate cut and first home buyer grants have restored some confidence in property market with first time borrowers occupied 23.6% home borrowing market in November.
Dun and Bradstreet's (D&B) Economic and Risk Outlook Report says Australian real gross domestic product (GDP) would slow to zero through 2009, from an estimated 1.9 per cent in 2008.
Today the Australian Bureau of Statistics publishes Labour Force Data for December. The Reserve Bank of Australia monthly Bulletin is due.
M&A News
UBS revealed that it has a 5.1 percent stake in RHG(ASX:RHG) - the remainder of the former RAMS Home Loans Group. Early in the credit crunch Westpac Banking Corp(ASX:WBC) acquired RHG's name and retail business.
Important Corporate News
Wesfarmers(ASX:WES) has heightened expectations it will soon be forced to tap shareholders for an equity injection of up to A$4 billion, after warning its half-year profits would fall and dividends could be cut. The company needs to refinance more than A$7 billion of debt by October next year - part of it due to its A$19 billion acquisition of Coles.
Rio Tinto(ASX:RIO) said Jim Leng, deputy chairman of India's Tata Steel, would succeed Paul Skinner as chairman of the mining group. The 64-year-old Skinner would formally step down on April 20.
Oil refiner Caltex(ASX:CTX) said last year's profits were up to $50 million higher than previously expected. The company has an unaudited replacement cost of sales operating profit of A$185 million for the 2008 full year, compared with the range of A$135 million to A$155 million forecast in December.
Explorer Ivanhoe Australia(ASX:IVA) says the company is in a robust financial position and will continue work on key projects in Queensland despite the economic downturn. The company has yesterday released its significant copper drilling results from Mount Elliot project near Cloncurry.
Timbercorp(ASX:TIM) reported a 32 percent drop in net profit for fiscal 2008 and is now anticipating a A$5 million reduction in this year's earnings due to lower asset valuations associated with the Timbercorp Primary Infrastructure Fund and the Timbercorp Orchard Trust.
Atlas Iron Limited(ASX:AGO) said it has completed a maiden JORC resource estimate for its newly discovered Anson Deposit at Wodgina of WA. It is the beginning for Wodgina and the potential of the North Pilbara region is largely untapped, Atlas says in a statement.
Contact
Michelle Liang
Asia Business News Asia Bureau
Tel: +61-2-9247-4344
Email: michelle.liang@abnnewswire.net
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